Question about chapter 13

[CharlotteInvest]

What is the name of your state? nc

does a homeowner in chapter 13 that has been dismissed have to file chapter 7 if they want to sale their home? the reason why i am asking is because a lady is telling me that her bankruptcy attorney wants her to file chapter 7 to sell her house so the lender won't come after her for the difference if she does a short sale?

i told her i am not an attorney but if negotiated the lender will probably issue a 1099, but it could be written off due to the fact she was insolvent and couldnt afford to keep the house.

any suggestions or comments are all welcomed.

 

[bigun]

A Chapter 7 filing will discharge a deficiency balance as well as any other unsecured debt.
As to the question of insolvency-that'a a question only her accountant can answer. Keep in mind, assets like ERISA qualified retirement accounts are exempt assets in bk. She may not be insolvent in the eyes of the IRS.

 

[CharlotteInvest]

She may not be insolvent in the eyes of the IRS.

great point, i guess she needs to speak with a cpa to see whats the deal. thanks bigun!